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Chrysler, VW lead February sales gains

U.S. auto sales led by Chrysler Group surged 16 percent in February, giving the industry its strongest showing in four years in a fresh sign that the recovery is gaining more traction.

Total light vehicle sales rose to 1.15 million units as the seasonally adjusted sales annual rate hit 15.1 million. That was the healthiest pace since the 15.5 million rate in February 2008, just months before the industry collapse that sent Chrysler and General Motors into bankruptcy.

"February felt great," said Al Castignetti, vice president of U.S. sales for Nissan North America, which set a February record in posting a 16 percent gain. "Consumer demand is coming back, and I think it's coming back fairly aggressively."

February also marked the second straight month that the SAAR topped 14 million, helping dampen concerns over the run-up in gasoline prices nationwide late in the month.

BMW Group, Jaguar Land Rover, Mazda and VW Group were among companies with gains of 30 percent or more. Hyundai-Kia surged 26 percent, aided by a 37 percent gain at Kia.

Toyota Motor Sales and American Honda each posted 12 percent increases as they continued to rebound from the earthquake in Japan last March. It was Honda's first double-digit gain since April and Toyota's first since February 2011.

Extra sales day

General Motors and other automakers said the higher-than-expected sales increase also reflected stronger employment and credit availability, and an improving housing market.

Automakers were also helped by an extra sales day because of leap year.

Ken Czubay, head of sales and marketing at Ford Motor Co., said "sales momentum built as February unfolded, with higher fuel prices driving consumer demand for more fuel-efficient vehicles in the second half of the month."

The drop in heating costs resulting from the warmer winter also helped offset somewhat higher gasoline costs for consumers, Paul Taylor, chief economist for the National Automobile Dealers Association, said Thursday.

U.S. light vehicles sales have climbed 14 percent this year through February to 2.06 million.

GM rebounded from a January decline with a 1.1 percent increase compared with a year ago, when more-generous incentives inflated the automaker's sales by 46 percent.

Ford's sales rose 14 percent--its biggest increase since March--and the automaker said it would hike second quarter production across North America by 3 percent, or 20,000 units, to 730,000.

Toyota, Honda rebound

Toyota's 12 percent gain was its fourth straight monthly advance. A 21 percent advance at Lexus was the biggest in nearly two years.

Honda's increase was its second consecutive monthly gain, spurred by a 13 percent advance at the Honda division. Honda said the all-new CR-V crossover set a February sales record of 24,759, up 25 percent from a year ago. Deliveries of the Civic rose 36 percent.

Analysts tracked by Bloomberg expected the SAAR to come in at 14.2 million units for the month.

Jaguar Land Rover North America President Andy Goss said the U.S. market continues to show "positive signs in 2012." The automaker's sales rose 32 percent last month, with Land Rover volume rising 27 percent and Jaguar posting an increase of 48 percent.

Nissan Division sales rose 17.1 percent, while deliveries at Infiniti increased 1 percent. Nissan said Altima sales set a February record with 32,953 deliveries, up 58 percent. An all-new, fifth generation Altima will be shown at the New York auto show in April, Nissan announced Thursday.

In addition to the Passat, Volkswagen was helped by robust demand for the compact Jetta. VW said diesel sales were up 55 percent over February 2011 and accounted for 21 percent of the brand's 30,577 February sales.

Chrysler said its sales were driven by a 126 percent increase in car deliveries, a more fuel-efficient model lineup, notably the Fiat 500, and continued strong demand for its Jeep and Ram truck lineups.

The Fiat brand had its best sales month since its launch, Chrysler said, with deliveries of the 500 up 69 percent to 3,227 units in February.

"A few years ago higher fuel prices were a major threat to our total vehicle sales whereas today those higher prices have become far less of an issue," Reid Bigland, head of U.S. sales for Chrysler, said in a statement.

J.D. Power and Associates had projected February sales would rise 3 percent from a strong February 2011. TrueCar.com estimated the increase at nearly 10 percent.

A steady rise in inventories and new models helped drive new vehicle sales at some automakers. The nation's aging car and truck population is also prompting consumers to acquire a new vehicle after several years of austerity.

In addition, lending terms are easing, putting new vehicles within reach of consumers with subpar credit ratings who have been largely shut out of the market since the downturn.

Incentive spending

Robert Baird & Co. analyst David Leiker said successful Presidents' Day sales events also aided February sales.

TrueCar estimated incentives averaged $2,468 per vehicle last month, an increase of 0.6 percent from January but down 4.2 percent from February 2011.

Rising gasoline prices and the lackluster housing market could stymie new car and truck demand, though most analysts see the rebound in sales continuing throughout 2012. But as the recovery continues to inch forward, auto sales will remain dependent on the overall health of the U.S. economy.

Federal Reserve Chairman Ben Bernanke told a congressional committee on Wednesday that the Fed is maintaining its modest expectations for the U.S. economy this year, despite some evidence of stronger growth.

The U.S. jobless rate has dropped to 8.3 percent in January from 9.1 percent last July.

Despite the recent rise in oil prices, the Fed estimates the American economy will expand by 2.2 percent to 2.7 percent this year. That is the same rate of growth that occurred during the second half of 2011.